Ajio, an online fashion retail platform owned by Reliance Industries, is reportedly creating a new marketplace for low-cost fashion products. The marketplace, called Ajio Street, is said to work on a zero-commission model, with merchants being promised 15-day payment settlements. 

Ajio is said to be aiming the new platform at non-metro consumers in tier II to tier IV cities and towns who may not shop online frequently. This would make Ajio a direct competitor to etailer Meesho, which specialises in low-cost longtail fashion and accessory products. Ajio is hoping that the zero-commission model will increase its user base by tapping into a new set of consumers from these markets. 

The low-cost fashion and accessory products typically have an average order value of around Rs 300-350, while the same for platforms selling branded goods would be over Rs 1,000. Industry analysts and executives said the move from Reliance is worth noting as it has been positioning itself as the destination for branded fashion goods.

Since its inception, Ajio’s core market has been top metro cities where it primarily sells branded apparel, shoes and other products. In the December quarter earnings of Reliance Industries, the company said that Ajio had expanded its customer by 33 per cent and catalogue size by 62 per cent year-on-year. However, online fashion is still only 15-20 per cent of the total fashion market in India. 

The move to tap into non-metro consumers could potentially allow Ajio to capture a larger share of the market.